Because of investment uncertainties one can always look to the government to place their well-earned dollars to earn quality interest. The Government of Canada offers savings bonds: Canada Savings Bond, and Canada Premium Bond. These bonds are safe and secure investments that are made available to all Canadians (adult or minor).

Although their interest rates are quite competitive to private banks they are not without their restrictions.

The CSB can be redeemed for cash at any time while the CPB can only be redeemed on the anniversary of its issue date (and 30-days thereafter). Both types of bonds have a 10-year term until they mature. However, rates of return will vary during its life, as determined by the Minister of Finance.

The primary difference between Canada Premium Bond and the Canada Savings Bond is the rate of return. The Premium Bond has a higher rate of return. But in exchange for this higher rate restrictions apply on withdraws, as outlined above.

To purchase a bond you only need a minimum of $100; and can only be done in Canadian currency. The maximum size for a bond is $500,000.

Although bonds are usually in the name of a specific person one can add additional owners after purchasing the bond(s). These new owners will only take custody of the funds upon the original owner’s death.

If you own a CPB and attempt to withdraw funds outside its redeemable window then you will forfeit any earned interest. However, in special cases, such as the owner has died, or through a court order, one can redeem a CPB outside their anniversary window without penalty.

It should be noted though that no interest is earned on either bond types during the 1st three months after it was issued. And no interest is earned during the month in which the bonds are redeemed.